For the financial year ending March 31, 2015, the JMMB Group recorded operating revenue of J$10.32 billion, an increase of 18.2% over the prior year, across its operations in the Dominican Republic, Jamaica and Trinidad and Tobago.
This growth in operating revenue was largely attributed to gains on securities trading, foreign exchange margins from cambio trading, and commission income; which grew by 47.1%, 59.2% and 26% respectively. Their positive performance was as a result of volume increases and the company taking advantage of market opportunities. The company's Net Interest Income (NII) remained steady at J$5.26 billion, year-over-year.
The Group's net profits while showing a reduction over the prior year (2014 -J$3.06 billion to J$2.05 billion), was impacted in the fourth quarter by one-off provisioning of J$259.3 million on its investment portfolio. The prior year results also included one-off gains on acquisition of subsidiaries (IBL Group), accounting for J$361.7 million.
Streamlining of Operational Synergies Continues
As the JMMB Group continues to leverage operational synergies being realized from its growth in the Caribbean region, expenses associated with: the expansion of the JMMB Group (through the acquisition of the IBL Group and AIC Securities in Trinidad & Tobago); costs attributable to the reorganization of the Group in the Dominican Republic; integration costs; and growth in the subsidiaries across the regional markets, largely drove the increase in the Group's operating expenses. Those expenses increased from J$5.67 billion to J$7.79 billion. An increase in the asset tax borne by the Group, as well as inflationary increases awarded to staff, also factored into the increase in operating expenses, year-over-year.
The JMMB Group's management team continues to implement medium to long-term measures, which will leverage the operational synergies to be derived from the new regional Group structure, as it pursues an integrated financial services model across the various countries in which it operates. These will, no doubt, reduce operating expenses in the near future.
The Group continues to exceed regulatory capital requirements as evidenced by the Group's capital-to-risk weighted assets ratio, which stood at 14.1%, as against the Financial Services Commission (FSC) benchmark stipulation of 10%, at minimum.
The Way Forward
As a part of the company's long-term strategy to reap greater efficiency and synergies, JMMB Group remains committed to a diversification thrust in the region; which it expects will bolster its profitability over time, although showing lower profitability in the short-run. In keeping with this approach, the company has made the penultimate step in its organizational restructuring; from JMMB Ltd. to JMMB Group Ltd. Additionally, in keeping with its strategy of becoming a fully-integrated financial centre, the JMMB Group has rolled out its first integrated branch in Jamaica, and is taking steps to deepen its regional presence with the introduction of new offerings across its operations. Significant expansion is expected in the Dominican Republic, with the inclusion of new business lines namely: banking, investment fund management (mutual funds) and a trust company, during the new financial year. In Jamaica, two new unit trust offerings have been brought to market, in keeping with market demand.